Philippine Chamber Of Commerce And Industry
2014 LECTURE A. COURT OF TAX APPEALS (CTA)1. Laws and Implementing rules
2. Special and Limited Jurisdiction3. CTA has no power or authority to deviate from the ruling of the Supreme CourtB. CTAS JURISDICTION 1. CTA DIVISION
2. CTA EN BANC3. PERIOD TO APPEAL TO CTA
C. GENERAL PRINCIPLES ON TAX REMEDIES UNDER NIRCPRESCRIPTIVE PERIODS
3. CRIMINAL OFFENSES
D. REMEDIES OF THE GOVERNMENT
E. REMEDIES OF THE TAXPAYER
1. ADMINISTRATIVE PROTEST
2. CLAIM FOR REFUND
F. OTHER RECENT SIGNIFICANT CASES
A. COURT OF TAX APPEALS (CTA)1. LAWS AND IMPLEMENTING RULES
a. Republic Act No. (RA) 1125 - AN ACT CREATING THE COURT OF TAX APPEALS
SPECIAL AND LIMITED JURISDICTION
EFFECTIVE:JUNE 16, 1954
b. RA 9282 AN ACT EXPANDING THE JURISDICTION OF THE COURT OF TAX APPEALS (CTA), ELEVATING ITS RANK TO THE LEVEL OF A COLLEGIATE COURT WITH SPECIAL JURISDICTION AND ENLARGING ITS MEMBERSHIP, AMENDING FOR THE PURPOSE CERTAIN SECTIONS OF REPUBLIC ACT NO. 1125, AS AMENDED OTHERWISE KNOWN AS THE LAW CREATING THE COURT OF TAX APPEALS, AND FOR OTHER PURPOSES.
SAME RANK AS COURT OF APPEALS (CA)
ENLARGEMENT OF MEMBERSHIP
CREATION OF CTA EN BANC AMENDS RA 1125 An Act Creating the Court of Tax Appeals
EFFECTIVE: APRIL 23, 2004
c. RA 9503 -AN ACT ENLARGING THE ORGANIZATIONAL STRUCTURE OF THE COURT OF TAX APPEALS, AMENDING FOR THE PURPOSE CERTAIN SECTIONS OF THE LAW CREATING THE COURT OF TAX APPEALS, AND FOR OTHER PURPOSES.
ENLARGEMENT OF MEMBERSHIP
CREATION OF THIRD DIVISION
EFFECTIVE:JULY 5, 2008.
IMPLEMENTING RULES The Revised Rules of the Court of Tax Appeals (RRCTA) [A.M. No. 05-11-07-SC].
2. Special and Limited Jurisdiction As a specialized court dedicated exclusively to the study and resolution of tax issues, the CTA has developed an expertise on the subject of taxation. The Court cannot be compelled to set aside its decisions, unless there is a finding that the questioned decision is not supported by substantial evidence or there is a showing of abuse or improvident exercise of authority. Therefore, its findings are accorded the highest respect and are generally conclusive upon this court, in the absence of grave abuse of discretion or palpable error. GULF AIR COMPANY, PHILIPPINE BRANCH (GF) vs. COMMISSIONER OF INTERNAL REVENUE G.R. No. 182045. September 19, 2012.
The CA and the CTA are now of the same level pursuant to RA 9282. Decisions of the CA are thus no longer superior to nor reversive of those of the CTA. xxx all rulings of this Court on questions of law are conclusive and binding on all courts including the CA. All courts must take their bearings from the decisions of this Court. Systra Philippines, Incorporated v. CIR, GR 176290, Res. Sept. 21, 2007, 533 SCRA 776. CTA, as a court of record, is required to conduct a formal trial (trial de novo) to prove every minute aspect of the claim citing CIR v. Manila Mining Corporation, G.R. No. 153204, August 31, 2005, 468 SCRA 571, 588-589. Kepco Phil. Corp. vs. CIR, GR 179356, December 14, 2009. 3. CTA has no power nor authority to deviate from the ruling of the Supreme Court; Dispositive portion prevails over body
Facts: In the consolidated refund cases, the dispositive portion of a Supreme Court Decision originally consisting of three CTA cases docketed as CTA 6365, 6383 & 6612, only the CA Case 80675 (covering CTA 6365 & 6383) was mentioned without reference to CA 83165 (CTA 6612). After CTA issued a writ of execution covering CTA cases 6365 & 6383, Fortune Tobacco Corporation filed a motion for the issuance of additional writ of execution for CTA case 6612 which was denied by both CTA Division and en banc. Ruling: The dispositive portion of the SC decision was corrected to reflect the omitted case. CTA cannot be faulted for denying FTCs Motion for Additional Writ of Execution filed in CTA Case Nos. 6365, 6383 and 6612 for it has no power nor authority to deviate from the wording of the dispositive portion of Our July 21, 2008 Decision in G.R. Nos. 167274-75. To reiterate, the CTA simply followed the all too familiar doctrine that when there is a conflict between the dispositive portion of the decision and the body thereof, the dispositive portion controls irrespective of what appears in the body of the decision. Veering away from the fallo might even be viewed as irregular and may give rise to a charge of breach of the Code of Judicial Conduct. CIR v. Fortune Tobacco Corporation, GR 167274-75 & 192576, Sept. 11, 2013. B. CTAS JURISDICTION ON CASES INVOLVING NIRC 1. CTA DIVISION (a) EXCLUSIVE APPELLATE JURISDICTION to review by appeal:
(1)Decisions of the Commissioner of Internal Revenue (CIR) in cases involving disputed assessments, refunds of internal revenue taxes, fees or other charges, penalties in relation thereto, or other matters arising under the National Internal Revenue Code (NIRC) or other laws administered by the Bureau of Internal Revenue (BIR).
Exclusive & Original power to interpret the provisions of the NIRC & other tax laws is vested with the CIR, subject to review by Sec. of Finance. Sec. 4, NIRC. CTAs jurisdiction to resolve tax disputes excludes the power to rule on the constitutionality or validity of a law, rule of regulation, which is vested in the regular courts. British American Tobacco vs. Jose Isidro Camacho, et al, G.R. No. 163583, Aug. 20, 2008.
CIRs denial of taxpayers entitlement to amnesty program is a decision appealable to the CTA under decisions on other matters arising from other laws administered by the BIR, in this case it is RA 9480, the Tax Amnesty Law. Philippine Aluminum Wheels, Inc. vs. CIR, CTA 7817, Nov. 12, 2012.
Issue on prescription of the BIRs right to collect taxes fall under other matters over which the CTA has appellate jurisdiction. CIR vs. Hambrecht & Quist, G.R. 165229, Nov. 17, 2010.
FINAL DECISION APPEALABLE TO CTA
Final Decision on Disputed Assessment (FDDA) issued by Deputy Commissioner, a duly authorized representative of CIR, may still be elevated to the CIR within 30 days from receipt and said FDDA shall not attain finality. [Sec. 3.1.5, RR 12-99] College Assurance Plan Phils., Inc., represented by its Vice-President for Accounting Services, Mr. Alfeo S. Pelayo v. CIR, CTA 7190, Aug. 16, 2013.
A letter issued by Revenue District Officer which is still subject to approval of CIR is not a final decision appealable to CTA. Brixton Investment Corporation v. CIR, CTA Case 8379, Aug. 12, 2013.
A demand letter for payment of delinquent taxes is the Final Decision on disputed assessment appealable to CTA. [citing Oceanic Wireless Network, Inc. v. CIR, et al., GR 148380, Dec. 9, 2005, 477 SCRA 205] Cagayan Corn Products Corporation v. CIR, CTA Case 8491, July 8, 2013.
(2) INACTION by the CIR in cases involving disputed assessments, refunds of internal revenue taxes, fees or other charges, penalties in relation thereto, or other matters arising under the NIRC or other laws administered by the Bureau of Internal Revenue, where the NIRC provides a specific period for action. [OPTIONAL NOT MANDATORY in the case of disputed assessments but MANDATORY in the case of claims for refund. Sections 228 & 229, NIRC; Section 3(a)(2), Rule 4, RRCTA; Lascona vs. CIR, G.R. No. 171251, March 5, 2012 reversed CA in CA-G.R. SP No. 58061, Oct. 25, 2005 & reinstated the Decision and Res. of CTA in Case No. 5777, Jan. 4, 2000.] CTAs JURISDICTION; TAXPAYER MAY AWAIT THE FINAL DECISION OF THE CIR EVEN AFTER THE LAPSE OF THE 180-DAY PERIOD UNDER SEC 228 OF THE NIRC
On March 27, 1998, the CIR issued an assessment against Lascona Land Co., Inc. (Lascona) informing the latter of its alleged deficiency income tax for the year 1993 in the amount of P753,266.56. On April 20, 1998, Lascona filed a letter protest which was denied by BIR Regional Director, RR No. 8, Makati City, in his Letter dated March 3, 1999. The SC held that the disputed assessment did not become final and executory when Lascona decided to await the final decision of the CIR. In case of CIRs inaction on the protested assessment, the taxpayer may (1) file a petition for review with the CTA within 30 days after the expiration of the 180-day period; or (2) await the final decision of the Commissioner on the disputed assessment and appeal such final decision to the CTA within 30 days after the receipt of the decision citing RCBC vs. CIR, G.R. No. 168498, April 24, 2007 and Section 3 A (2), Rule 4 of the Revised Rules of the CTA.
These options are mutually exclusive and resort to one bars the application of the other. Lascona Land Co., Inc. vs. CIR, G.R. No. 171251, March 5, 2012.
(3) Decisions, orders or resolutions of the Regional Trial Courts (RTCs) in LOCAL TAX CASES originally decided or resolved by them in the exercise of their original jurisdiction. CTA has jurisdiction over a special civil action for certiorari assailing an interlocutory order issued by the RTC in a local tax case. The City of Manila, represented by Mayor Jose L. Atienza, Jr. and Ms. Liberty M. Toledo, in her capacity as the City Treasurer of Manila vs. Hon Caridad H. Grecia-Cuerdo, et al., GR 175723, Feb. 4, 2014. (4) Decisions of the Commissioner of Customs in cases involving liability for customs duties, fees or other money charges, seizure, detention or release of property affected, fines, forfeitures or other penalties in relation thereto, or other matters arising under the Customs Law or other laws administered by the Bureau of Customs. [Rule 4, S